The Revel Casino Hotel in Atlantic City can’t seem to do anything the easy way. Just a couple weeks after a US Bankruptcy Judge terminated a sale to Florida developer Glenn Straub, which actually allowed the two sides to agree to a new sale at a reduced price, a second potential buyer has entered the picture in the hopes of swooping in and taking the Revel right out from under Straub’s firm.
The new potential buyers are partners Isek Shomof and Leo Pustilnikov. Shomof is a Los Angeles developer and Pustilnikov is his partner, and the two are offering $80 million for the Revel, the now closed casino property that was once hoped to be the crowning jewel of Atlantic City’s casino landscape.
Their offer may appear lower than the $82 million that Straub agreed to, but they say it is actually larger, since the Revel will be able to keep a $10 million deposit from Straub (forfeited when the sale wasn’t closed by Feburary 9) whether he buys the property or not.
“We submitted an offer and provided proof of funds for the entire purchase,” Pustilnikov said on Monday.
Wednesday Hearing Could Clarify Situation
The new offer adds yet another wrinkle to the uncertainty surrounding the sale of the Revel to Straub. A hearing on Wednesday in Camden might lead to an approval of the deal, but that’s not guaranteed: after all, some of Revel’s current tenants are still opposing the sale, as Straub wants to be able to end their leases and force some nightclubs and restaurants to change locations.
Meanwhile, ACR Energy Partners, which runs the power plant that supplies power exclusively to the Revel resort, has asked the judge presiding over the case to take control of the sale away from Revel.
Some of these complainants might feel more comfortable if Pustilnikov and Shomof were the buyers.
“We would like the tenants to remain,” Pustilnikov said. “The tenants have invested a lot of money into their spaces and have performed well in their spaces prior to them being unceremoniously removed.”
No Comment Yet from Revel
So far, the Revel has yet to comment on the last minute offer from Shomof, who has been described as a “prominent redeveloper of older buildings” in Los Angeles by the Los Angeles Times. However, Pustilnikov says that he and Shomof do plan to visit Atlantic City to take a look at the Revel, even if they haven’t been officially invited to do so yet.
“They refuse to show us the premises, but at the very least we will be touring the central utility plant with ACR and their attorneys, and negotiating with them to hopefully enter into a resolution for the power, because that is one of the main concerns ongoing,” said Pustilnikov.
No matter who ultimately wins the right to purchase the Revel, they’ll be doing so at an incredible discount. The Revel was opened in 2012 after being constructed for $2.4 billion, meaning the current bids are less than 4 percent of the initial building price. They’re also pretty significantly discounted from the original auction price: the first buyer was expected to be Toronto’s Brookfield Asset Management, which bid $110 million, but backed out after a dispute over debts owed to the power plant.